IT News on October 29th: A Microsoft spokesperson revealed to Business Insider that the company offered voluntary severance packages to more than a quarter of its employees this week, but it is estimated that the final number of employees accepting the offer will not exceed 3,000.

On the 28th local time, Amy Hood from Microsoft CFO reiterated this judgment in an internal memo and responded to employees' questions about the reasons behind the introduction of the program. "I know that some employees do not understand why we are launching a voluntary resignation program this week. Our intention is to allow those who wish to leave Microsoft to make their own decisions regarding how they resign. Considering the career development opportunities offered by the company, we expect that very few people will take advantage of this program."

This memo is a financial report email that Hood sends to employees every quarter. When Microsoft releases its quarterly results, she usually updates the internal staff on the business situation.

In the past, most emails simply repeated the content found in public financial reports. However, since this week's severance package has drawn widespread attention in the tech industry, Hud has made a special clarification on the matter.

Earlier this year, Microsoft also introduced another voluntary retirement compensation program. At that time, about one-third of the eligible employees chose to participate, which allowed Microsoft to reduce the number of subsequent layoffs as well.

Microsoft says that it is not expected that many people will adopt the new solution launched this week.

The full text of the internal memo from CFO attached to IT is as follows:

Dear colleagues:

This afternoon, we announced our financial results for the first fiscal quarter. The company's revenue increased by 19%, and operating profit increased by 21%, both exceeding Wall Street's expectations.

After entering the fiscal year 2027, we also made a significant adjustment to the way our financial reports categorized our business segments. For the first time in 12 years, we restructured our business reporting, merging the original three major business divisions into two: Agents and Infrastructure Business, and Devices and Consumer Business. The new classification better reflects Microsoft's actual operational situation, allowing for a more accurate depiction of everything from product development and resource allocation to how we create value for customers through the collaboration of various platforms. Based on the new framework, in the previous fiscal year, the Agents and Infrastructure Business contributed approximately 81% of the revenue, while the Devices and Consumer Business accounted for 19%.

The following are some of the key performance highlights of the two major business departments this quarter:

• Revenue from agent and infrastructure services increased by 23%.
• Microsoft's cloud revenue reached $63.9 billion (Note from IT: The current exchange rate is approximately 426.919 billion yuan), with a growth rate increasing to 30%. Among them, the revenue of Azure increased by 48%, and the demand for Foundry is accelerating.
• Calculated at a fixed exchange rate, the revenue of Microsoft's 365 Business Cloud increased by 18%, mainly due to the growth in high-end subscription products such as Copilot and E7, as well as the service revenue growth from Microsoft 365, Copilot, and GitHub Copilot which are billed based on usage.
• Microsoft The number of subscription seats for the 365 Business Edition has increased by 5%. The number of customers with over 50,000 Microsoft 365 Copilot seats has reached 8 times that of the same period last year.
• Microsoft 365 Consumer Cloud Services revenue grew by 17%, and the number of subscribed users increased by 7%.
• Industry solutions: Cloud business revenue grew by 10%. Both Dynamics 365 and LinkedIn's talent solutions business saw increases.

• Device and consumer business revenue decreased by 3%.
• After deducting the cost of data usage, revenue from search and advertising services increased by 12%. LinkedIn, Bing, and Edge all saw growth in their businesses.
• Windows OEM and device business revenue decreased by 22%, affected by the positive effects of the discontinuation of support for Windows last year, OEM partners clearing inventory, as well as weak market demand for PC. Xbox content and service business revenue decreased by 2%. Last week, we launched "Call of Duty: Modern Warfare 4," continuing to enable more players to enjoy excellent games on a wider range of devices.

Thanks to everyone's efforts, we have had a good start to the new fiscal year. I would like to express my special gratitude to the engineering team and the infrastructure delivery team for their hard work in accelerating resource delivery while ensuring a high level of reliability. The teams are also working to improve the efficiency of existing resources so that we can better meet the demands of our customers for the Azure platform. The demand in this area still exceeds our supply capacity.

I know that some employees don't understand why we are launching a voluntary resignation program this week. Our intention is to allow those who wish to leave Microsoft to make their own decisions regarding how they depart. Considering the career development opportunities offered by the company, we expect that very few people will take advantage of this program. We will also continue to provide employees with various learning and development opportunities to help them acquire new skills and achieve career growth at Microsoft.

In the future, we face tremendous development opportunities. To seize these opportunities, we will focus on creating excellent products and solutions to help our customers achieve their goals in terms of security, innovation, growth, and more. Thank you all for always prioritizing the creation of positive results and tangible value for our customers.

If you would like to learn more about this quarter's financial report and the performance outlook for the second fiscal quarter, you can watch the live broadcast at 2:30 PM Pacific Time today, or listen to the replay, or visit the investor relations website to read the meeting minutes. Lastly, please note the Microsoft Ignite conference to be held from November 17th to 20th. During that time, we will demonstrate how innovations in AI, cloud computing, data, security, and Copilot areas come together to help customers achieve business transformation.

Sincere thanks to everyone!

Amy